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Apple nears $3 trillion market cap. Why it still has more room to run at record highs

Apple shares hit all-time highs again Monday, extending a record run for a fifth session in a row.

The stock is one rally away from another major milestone. If the stock gains just 2% to trade at $182.86, that would give the company a $3 trillion market cap, the largest S&P 500 stock by far.

Apple may be too extended to chase right here but it has not topped out yet, according to Boris Schlossberg, managing director of FX strategy at BK Asset Management.

“Fully cognizant that the stock is in a massive gamma squeeze right now, I still think Apple is probably going to be the most interesting stock into the next year for two very simple reasons. They are the only company amongst the mega cap FANGs that is producing two radically new products with the Apple Car and the augmented reality/virtual reality product that hopefully is going to come out sometime next year,” Schlossberg told CNBC’s “Trading Nation” on Thursday.

An Apple car project has been a focus for Wall Street for years, but reports in November that Apple had accelerated development of a fully autonomous vehicle gave shares a lift.

“That’s really what I think that the investors are betting on, because this is going to be their next act… Apple obviously has the history of creating transformative products in the digital space,” Schlossberg said. “If they happen to succeed in this space this way, that’s literally the next wave of consumer technology which they might be able to own. So I think you kind of have to make the bet on Apple at this point as far as a high stakes flyer.”

With Apple as the speculative bet, Schlossberg says a good trade would be to pair that position with Microsoft for its “strong steady subscription revenue business.”

“To me the perfect marriage is Apple as a lottery ticket and Microsoft as an annuity going forward. That’s how I’d like to play it,” he said.

Microsoft is the second largest stock on Wall Street, behind Apple, and one of a handful of stocks with market caps above $1 trillion.

Tasked with choosing her favorite trillion-dollar stock, Laffer Tengler Investments CEO and Chief Investment Officer Nancy Tengler opted for Amazon.

“This is a company that has traded sideways for the last 18 months on … tough comps from the 2020 ecommerce binge,” Tengler told CNBC. “But they’ve also been gaining share in e-commerce, and they made a very smart assessment to not increase prices to build brand and customer loyalty. And I think that’s going to work to their benefit.”

Amazon has pulled back 9% from a record high set in July. The stock has mostly traded between $3,000 and $3,600 since last summer.  

“We think there’s a lot of pricing power there, because Prime members have increased their annual purchases, they’ve increased their use of prime benefits, and so we think the company can raise prices. Plus, if you add in advertising and AWS growth, these are 30% margin businesses, both growing at 30%. And so we think the company is sort of poised to outperform going into 2022,” Tengler said.

Disclosure: Laffer Tengler Investments holds AMZN.


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